A Restatement Of Economic Liberalism Prologue: Capitalism and the permissive society Introduction :: The Historical Context :: Reasons For Suspicion :: The Rise Of The Word Man :: The Dilemma Of The Economic Liberal :: The New Left Attack :: Poverty And Equality :: 'Alienation' :: Student Dissent :: Contemporary Radicalism :: A turn of the tide?

'To declaim against present times, and magnify the virtue of remote ancestors, is a propensity almost inherent in human nature...'
David Hume, 'Of Refinements in the Arts’

The values of competitive capitalism have a great deal in common with contemporary attitudes, and in particular with contemporary radical attitudes. Above all they share a similar stress on allowing people to do, to the maximum feasible extent, what they feel inclined to do rather than conform to the wishes of authority, custom or convention. Under a competitive system, the businessman will make money by catering for whatever it is that people wish to do - by providing pop records, or nude shows, or candyfloss. He will not make anything by providing what the establishment thinks is good for them. An individual citizen is free to maximise his income by using his abilities (and his capital if he has any) to cater for public tastes. But he does not have to. He can go for the easiest or most congenial job, or the one with the most leisure; or, like most of us he can find some compromise between these alternatives. In any case his life-style is his own. He can concentrate on personal pleasure, social service at home, the relief of poverty abroad, or any combination of these and numerous other activities.

Competitive capitalism is far from being the sole or dominating force of our society and Galbraith is right to force this on our attention. But to the extent that it prevails, competitive capitalism is the biggest single force acting on the side of what it is fashionable to call 'permissiveness', but what was once known as personal liberty. Business enterprise can, of course, thrive and prosper alongside a great deal of 'moral' prohibitions and prescriptions, whether enforced by law or public opinion. But the profit motive will always be kicking against such restraints and seeking to widen the range of what is permissible - whether it is a nineteenth- century publisher launching an attack on orthodox religion or a twentieth-century theatrical or film producer challenging conventional concepts of decency and decorum. The profit motive will act both to stretch the existing law and as a force for its liberalisation.

As against these advantages it is often alleged that competitive capitalism is based on the false values of the 'consumer society'. Critics of this sort often forget that the great virtue of the consumer society is that no one is forced to consume. There may be middle class, or middle age pressures in that direction (and plenty of 'trendy' pressures of other sorts among the young); but social pressures are not the same as edicts enforced by the police, and the rise of the 'counter-culture' has itself set up pressures of an opposite kind, and the range of effective choice has been extended. To the extent that the competitive element prevails, a citizen can be equally indifferent to right-wing attacks on the self-indulgence of modern youth and to the traditional left-wing demand that all economic activity be channelled into some higher national purpose. The ethos of the market economy can be summed up in the vernacular as 'doing your own thing'. A capitalist market economy is not, of course, an equal society. But it is a powerful agent for disrupting existing class barriers and official hierarchies. Indeed, commercial societies are notorious, among those who dislike this aspect, for bringing new people and families to the fore and undermining traditional status barriers.

The expression 'competitive capitalism' is used here in its broadest possible meaning. It does not exclude the existence of a substantial public sector; nor does it prevent the state from carrying out a great many functions which are required if the market is to transmit people's preferences effectively - and this includes a great many measures in the anti-pollution field. But the emphasis is on the profit motive, consumer choice and competition. The conditions required for these activities to lead to tolerable results will be discussed in greater detail in later essays. The aim of this introductory chapter is to state the issue in its simplest terms; and rather than take refuge in terms such as 'mixed economy' or 'social market economy', I shall stick to the more provocative term 'competitive capitalism'. I would add, however, that 'competitive capitalism' is not a partisan slogan. When it comes to the test of practical application, it has at least as many opponents among Conservatives as among Labour supporters, and among businessmen as among trade unionists.

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